3 Ways In Which You Can Transfer Your Property

If you are looking for ways to transfer your immovable assets, you have three legal options: sale deed, gift deed and relinquishment deed. However, you can't pick one of them randomly as each of these instruments play a specific role.

Sale deed

It is the most widely used means when we sell our property for monetary consideration. Also known as transfer deed, a sale deed has to be registered at the sub-registrar's office, after which the property gets transferred to the new owner. The person buying the property need not be related to you.

Advantages: It is an easy and a fool-proof way to transfer a property. A registered sale deed is a proof that you have sold your property. It will help prevent forgeries and frauds as the transaction information will be in the public domain.

Limitations: The selling of property results in long and short-term capital gains.

Gift deed

Under this deed, you can gift your immoveable and moveable property without any exchange for money. To gift any immoveable property, all you have to do is to draft a deed on a stamp paper, attested by two witnesses, and register it with the registrar's office. Section 17 of the Registration Act, 1908, mandates that transfer of an immoveable property should be registered, failing which it would become invalid. However, one can gift moveable property such as jewellery or car without any registration. The gift deed is irrevocable and the beneficiary is the rightful owner after the deed has been transferred.

Advantages: There are no tax implications if you are gifting a property to your relative. Here, a relative includes your spouse, sibling, siblings of your spouse, siblings of your parents, etc.

Outside this, a property received by an individual will be taxable if the stamp duty value of such a property received without consideration exceeds Rs 50,000.

Limitations: Although a gift deed can't be revoked, it can be challenged in the court on the grounds of coercion or fraud.

Relinquishment deed

If you are a co-owner in a property and want to relinquish your rights in that property, relinquishment deed is the best bet. Similar to a gift deed, the transfer is irrevocable even if it's without any exchange for money. It has to be registered and attested by two witnesses. There are no discounts or tax benefits for relatives as far as the stamp duty is concerned.

Advantages: A relinquishment deed allows seamless transfer if a property is owned jointly. It is commonly used when a person dies without leaving a will and the legal heirs end up inheriting the property.

Limitations: Tax laws put relinquishment under the head of 'transfer' and not gift. Hence, there are no tax benefits.

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